GBP/USD remains on the defensive below the 1.2700 area, UK GDP eyed – by lilyfinancial GBPUSD Majors BOE Macroeconomics
Market players anticipated that the UK could avoid the recession as the data shows inflationary pressures easing. The highlight of the day will be the UK monthly Gross Domestic Product report on Thursday. The growth rate is expected to grow by 0.2% in June, compared to 0.1% prior. While the quarterly GDP is expected to stay at 0% versus 0.1% prior.
The weaker than expected figure could refrain the Bank of England from aggressively tightening policy. This, in turn, weighs on the Pound Sterling and acts as a headwind forOn the US Dollar front, the US Consumer Price Index rose to 3.2% YoY from 3% in June. The figure was below the market consensus of 3.3%. While the Core CPI figure, which excludes volatile food and energy prices, fell to 4.7% from 4.8%.
The CME FedWatch Tools indicated that the odds for a rate hike in September is at 10%, while for the November meeting, it dropped to 23.6% from 33.8% a month ago. Moving on, the UK will release the preliminary Q2 Gross Domestic Product on Friday. Also, the UK Industrial Production and Manufacturing production data will be due. On the US docket, the key event will be the US Producer Price Index for July. These data could provide hints for a clear direction in GBP/USD.
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